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                                                                    EXHIBIT 10.3



                           ARI NETWORK SERVICES, INC.
                        1993 DIRECTOR STOCK OPTION PLAN
                  (Amended and Restated as of October 8, 1996)


1.  PURPOSE OF THE PLAN

     The purpose of the Plan is to attract and retain superior Directors, to
provide a stronger incentive for such Directors to put forth maximum effort for
the continued success and growth of the Company and its Subsidiaries and, in
combination with these goals, to encourage stock ownership in the Company by
Directors.

2.  DEFINITIONS

     Unless the context otherwise requires, the following terms shall have the
meanings set forth below:

     (a)  "Administrator" shall mean any committee of the Board of Directors or
          any executive officer or officers of the Company designated by the
          Board of Directors.

     (b)  "Board of Directors" shall mean the entire board of directors of the
          Company, consisting of both Employee and non-Employee members.

     (c)  "Code" shall mean the Internal Revenue Code of 1986, as amended.

     (d)  "Company" shall mean ARI Network Services, Inc., a Wisconsin
          corporation.

     (e)  "Director" shall mean an individual who is a member of the Board of
          Directors and is not an Employee.

     (f)  "Disability" shall mean a physical or mental incapacity which results
          in a Director no longer serving as a member of the Board of Directors.

     (g)  "Effective Date" shall mean May 21, 1993, or such other date as the
          Board of Directors may establish as the Effective Date.

     (h)  "Employee" shall mean an individual who is employed by the Company or
          a Subsidiary.

     (i)  "Exchange Act" shall mean the Securities Exchange Act of 1934, as
          amended.

     (j)  "Market Price" shall mean the average of the highest and lowest sale
          prices of the Shares as reported on the National Association of
          Securities Dealers, Inc. Automated Quotation - National Market System
          ("NASDAQ").  However, if at any time the Shares are listed on any
          exchange, "Market Price" shall mean the average of the highest and
          lowest prices at which 



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          Shares are sold on such exchange.  In the absence of reported sales on
          NASDAQ or on such exchange on any trading date, "Market Price" shall
          mean the average of the reported closing bid and asked prices for the
          Shares on NASDAQ or such exchange on such date.

     (k)  "Option" shall mean an option which does not comply with the
          provisions of Section 422 of the Code and which is granted under the
          Plan to purchase Shares.

     (l)  "Option Agreement" shall mean the agreement between the Company and a
          Director whereby an Option is granted to such Director.

     (m)  "Plan" shall mean this 1993 Director Stock Option Plan.

     (n)  "Share" shall mean a share of the $0.001 par value common stock of the
          Company.

     (o)  "Subsidiary" shall mean a subsidiary corporation of the Company as
          defined in Section 424(f) of the Code.

     (p)  "Triggering Event" shall mean the first to occur of any of the
          following:

          (1)  the acquisition (other than from the Company), by any person,
               entity or group (within the meaning of Section 13(d)(3) or
               14(d)(2) of the Exchange Act), directly or indirectly, of
               beneficial ownership (within the meaning of Rule 13d-3 under the
               Exchange Act) of 20% or more of the then outstanding shares of
               common stock of the Company or voting securities representing 20%
               or more of the combined voting power of the Company's then
               outstanding voting securities entitled to vote in the election of
               directors; provided, however, that no Triggering Event shall be
               deemed to have occurred as a result of an acquisition of shares
               of common stock or voting securities of the Company by any other
               corporation or other entity with respect to which, following such
               acquisition, more than 50% of the outstanding shares of the
               common stock or voting securities entitled to vote in the
               election of directors are then beneficially owned, directly or
               indirectly, by the persons who were the Company's shareholders
               immediately prior to such acquisition in substantially the same
               proportions as their ownership, immediately prior to such
               acquisition, of the Company's then outstanding common stock; or

          (2)  any merger or consolidation of the Company with any other
               corporation, other than a merger or consolidation which results
               in more than 60% of the outstanding shares of the common stock,
               and voting securities representing more than 60% of the combined
               voting power of the then outstanding voting securities entitled
               to vote in the election of directors, of the surviving or
               consolidated corporation being then beneficially owned, directly
               or indirectly, by the persons who were the Company's shareholders
               immediately prior to such acquisition in substantially the same
               proportions as their ownership, immediately prior to such
               acquisition, of the Company's then outstanding common stock; or

          (3)  any liquidation or dissolution of the Company or the sale or
               other disposition of all or substantially all of the assets of
               the Company; provided, however, that the 



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               transfer of substantially all of the Company's assets to a wholly
               owned Subsidiary in connection with any corporate reorganization
               of the Company shall not be deemed to be a Triggering Event for
               purposes of the Plan; or

          (4)  the Company shall enter into any agreement (whether or not
               conditioned on shareholder approval) providing for or
               contemplating, or the Board of Directors shall approve and
               recommend that the shareholders of the Company accept, or approve
               or adopt, or the shareholders of the Company shall approve, any
               acquisition that would be a Triggering Event under clause (1),
               above, or a merger or consolidation that would be a Triggering
               Event under clause (2), above, or a liquidation or dissolution of
               the Company or the sale or other disposition of all or
               substantially all of the assets of the Company; or

          (5)  whether or not conditioned on shareholder approval, the issuance
               by the Company of common stock representing a majority of the
               outstanding common stock, or voting securities representing a
               majority of the combined voting power of the outstanding voting
               securities of the Company entitled to vote in the election of
               directors, after giving effect to such transaction.

     Following the occurrence of an event which is not a Triggering Event
     whereby there is a successor holding company to the Company, or, if there
     is no such successor, whereby the Company is not the surviving corporation
     in a merger or consolidation, the surviving corporation or successor
     holding company (as the case may be), for purposes of this definition,
     shall thereafter be referred to as the Company.

3.  ADMINISTRATION

     The Plan shall be administered by the Administrator.  The terms and
conditions under which Options may be granted are set forth in Paragraph 6. The
Administrator shall have the authority to interpret the provisions of the Plan,
to establish such rules and procedures as may be necessary or advisable to
administer the Plan and to make all determinations necessary or advisable for
the administration of the Plan; provided, however, that no such interpretation
or determination shall change or affect the eligibility of Directors to receive
Options, the number of Shares covered by or the timing of any Option grant under
the Plan or the terms and conditions thereof.

4.  SHARES RESERVED UNDER PLAN

     The aggregate number of Shares which may be issued or sold under the Plan
and which are subject to outstanding Options at any time shall not exceed three
hundred thousand (300,000) Shares, which may be treasury Shares or authorized
but unissued Shares, or a combination of the two, subject to adjustment as
provided in Paragraph 10 hereof.  Any Shares subject to an Option which expires
or terminates for any reason (whether by voluntary surrender, lapse of time or
otherwise) and is unexercised as to such Shares may again be the subject of an
Option under the Plan subject to the limits set forth above.  A Director shall
be entitled to the rights and privileges of ownership with respect to the Shares
subject to the Option only after actual purchase and issuance of such Shares
pursuant to exercise of all or part of an Option.


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5.  PARTICIPATION

     Only Directors shall be eligible to receive Options under the Plan.

6.  OPTIONS: TERMS AND CONDITIONS

     Each Option granted under the Plan shall be evidenced by a written Option
Agreement which shall comply with and be subject to the following terms and
conditions:

     (a)   Number of Option Shares Granted; Grant Date.

          (i)   Initial Options.  Each Director initially elected to the Board
                of Directors after the Effective Date shall be granted an Option
                to purchase three thousand (3,000) Shares, or such other amount
                determined by the Board of Directors, on the date of such
                initial election (the "Initial Options").

          (ii)  Annual Option Grants.  On the first business day of each
                calendar year, each Director who has not within the prior twelve
                months received an Initial Option under Subparagraph 6(a)(i),
                above, shall be granted an Option to purchase five hundred (500)
                Shares.

          (iii) Attendance Grants.  On the first business day of each calendar
                year, each Director shall be granted an Option to purchase one
                thousand (1,000) Shares for each meeting of the Board of
                Directors attended by such Director during the prior year and
                three hundred fifty (350) Shares for each meeting of a committee
                of the Board attended by such Director during the prior year.

          (iv)  Other Grants.  Each Director shall be entitled to receive an
                option to purchase such number of Shares for performing other
                services for the Company if and as shall be determined from time
                to time by the Board of Directors.

          In the event that the number of Shares available for grant under the
          Plan is insufficient to make all grants hereby specified on the
          relevant date, then all Directors who are entitled to a grant on such
          date shall share ratably in the number of Shares then available for
          grant under the Plan.

     (b)  Option Exercise Price.  The per share purchase price of the Shares
          purchasable under each Option shall be equal to one hundred percent
          (100%) of the fair market value per Share.  The fair market value per
          Share referred to in the preceding sentences shall be the Market Price
          for the business day immediately preceding the date of grant of such
          Option.

     (c)  Exercise Period.  Subject to acceleration as provided below, or
          unless accelerated earlier by the Board of Directors, an Option shall
          become exercisable for all of the Shares covered thereby one year
          after the date of grant.  If a Director's tenure ends during the
          applicable one-year period due to death or Disability, each Option of
          such Director shall become immediately exercisable as to 100% of the
          Shares covered thereby.  If a Director's tenure ends 

         

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           during such period for any reason other than death or Disability (i)
           any Initial Options or  granted during such period shall become
           immediately exercisable as to 100% of the Shares covered thereby; and
           (ii) all other Options granted during such period shall lapse
           immediately as to one twelfth (1/12th) of the Shares covered by such
           Options for each month or portion of a month remaining in such one
           year period at the time of the termination.

           Upon the occurrence of a Triggering Event, each Option outstanding
           under this Plan shall become immediately exercisable as to 100% of
           the Shares covered thereby.  Once any portion of an Option becomes
           exercisable, it shall remain exercisable for the shortest period of
           (i) 10 years after the date of grant; (ii) one year (or such longer
           period permitted by the Board of Directors) after a Director's tenure
           on the Board of Directors terminates due to death or Disability; or
           (iii) three months (or such longer period permitted by the Board of
           Directors) after a Director's tenure on the Board of Directors
           terminates for any reason other than death or Disability.

     (d)   Payment of Exercise Price. The purchase or exercise price shall
           be payable in whole or in part in cash or Shares; and such price
           shall be paid in full at the time that an Option is exercised.  If a
           Director elects to pay all or a part of the purchase or exercise
           price in Shares, such Director shall make such payment by delivering
           to the Company a number of Shares already owned by the Director equal
           in value to the purchase or exercise price.  All Shares so delivered
           shall be valued at their Market Price on the business day immediately
           preceding the day on which such Shares are delivered.

7.  TRANSFERABILITY

     Except as otherwise provided herein, or permitted by the Board of
Directors, an Option granted to a Director under this Plan shall not be
transferable or subject to execution, attachment or similar process, and during
the lifetime of the Director shall be exercisable only by the Director.  A
Director shall have the right to transfer the Option upon such Director's death,
either by the terms of such Director's will, trust agreement or under the laws
of descent and distribution, and all such distributees shall be subject to all
terms and conditions of this Plan to the same extent as would the Director,
except as otherwise expressly provided herein.

8.  EXERCISE

     An Option shall be exercisable by a Director's giving written notice of
exercise to the Secretary of the Company specifying the number of Shares to be
purchased accompanied by payment in full of the required exercise price or other
arrangements satisfactory to the Company have been made to assure payment of the
exercise price.  The Company shall have the right to delay the issue or delivery
of any Shares under the Plan until (a) the completion of such registration or
qualification of such Shares under any federal or state law, ruling or
regulation as the Company shall determine to be necessary or advisable, and (b)
receipt from the Director of such documents and information as the Company may
deem necessary or appropriate in connection with such registration or
qualification.


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9.  SECURITIES LAWS

     Each Option Agreement shall contain such representations, warranties and
other terms and conditions as shall be necessary in the opinion of counsel to
the Company to comply with all applicable federal and state securities laws.

10.  ADJUSTMENT PROVISIONS

     In the event of any stock dividend, split-up, recapitalization, merger,
consolidation, combination or exchange of shares, or the like, as a result of
which shares of any class shall be issued with respect to the outstanding
Shares, or the Shares shall be changed into the same or a different number of
the same or another class of stock, or into securities of another person, cash
or other property (not including a regular cash dividend), the total number of
Shares authorized to be offered in accordance with Paragraph 4, the number of
Shares subject to each outstanding Option, the exercise price applicable to each
such Option, and/or the consideration to be received upon exercise of each such
Option shall be appropriately adjusted.

11.  TAXES

     The Company shall be entitled to pay or withhold the amount of any tax
which it believes is required as a result of the exercise of any Option under
the Plan, and the Company may defer making delivery of Shares obtained pursuant
to the exercise of an Option until arrangements satisfactory to it have been
made with respect to any such withholding obligations.  If a withholding
obligation should arise, a Director exercising an Option may, at his election,
provided applicable laws and regulations are complied with, satisfy his
obligation for payment of withholding taxes either by having the Company retain
a number of Shares having an aggregate Market Price on the date the Shares are
withheld equal to the amount of the withholding tax or by delivering to the
Company Shares already owned by the Director having an aggregate Market Price on
the business day immediately preceding the day on which such Shares are
delivered equal to the amount of the withholding tax.

12.  EFFECTIVENESS OF THE PLAN

     The Plan, subject to shareholder approval, shall become effective on and as
of the Effective Date.

13.  TERMINATION AND AMENDMENT

     The Board of Directors of the Company may terminate the Plan or make such
modifications or amendments thereof or to any Option as it shall deem advisable,
including, but not limited to, such modifications or amendments as it shall deem
advisable in order to conform to any law or regulation applicable thereto.  No
termination, modification or amendment of the Plan or any Option may, without
the consent of a Director, adversely affect the rights of such Director under an
outstanding Option then held by the Director.

14.  TENURE

     The grant of an Option pursuant to the Plan is no guarantee that a Director
will be renominated, reelected or reappointed as a Director; and nothing in the
Plan shall be construed as conferring upon a Director the right to continue to
be associated with the Company as a Director or otherwise.

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